Localized, "hypertargeted" marketing is a key buzzword through the rise of social media. But new research reveals localized marketing involves a lot more than selling a hypothetical McFalafel to people living in the Middle East.
Fresh Intelligence, a Toronto based market research company, has determined that a brand's ability to adapt and reflect consumers' core values in different areas of the world directly effects its sales in those markets.
The company looked at a number of global brands, including Nike, Colgate, Nokia, Nescafé and Coca-Cola, and compared their brand messaging, brand perceptions, consumer values and sales performance in Canada, Russia, the United States, Australia, Brazil and China. The consumer values they assessed on 22 qualities and the values people placed upon them, such as helping others, having friends and family, being successful, being innovative and feeling peaceful. It assessed all forms of messaging and communication for the brand, from TV and print to social media.
It found brands that tailor their messaging more closely to a general population's values perform better in those countries than brands that do not.
"In Brazil and China and more developing countries, Coca-Cola is positioned as an innovative brand and this resonates with them because they are all about striving for innovation," said Olga Churkina, research director at Fresh Intelligence. In North America, she noted, consumers have a completely different perception of the brand, which is more attuned to values of family and security (think of those cute and cuddly Coke polar bears).
A decade or two ago, most global brands were marketed in the same way throughout the world. The ads and executions may have been different and certain markets offered a different lineup of products, but the brand's main personality and value profile was the same, Fresh Intelligence said. That began to change when marketers realized targeting messaging to local markets resonated more deeply with consumers.
"Consumers think of a brand as a good friend and it is not possible [to do that] without adapting the brand to [local consumers'] objectives and what they really value in life," Ms. Churkina said. "It is becoming more important for people to perceive a brand as [they would] perceive a person. They need to speak the same language, they need to value the same things."
The company has developed the term "glocalization" and assigned scores to various brands to determine how a well a brand's perceived values correlate to that of a country, and relates to that brand's strength there.
"The correlation is very high between glocalization score and brand usage in a market," Ms. Churkina said. "A high score results in higher sales, all the way along."
How do peoples' value sets differ country to country? Fresh Intelligence polling found that physical beauty and being attractive to the opposite sex is valued by 66% of Brazilians, 75% of Russians and 81% of Chinese. But just 42% of Canadians cite it as a key value.
Being rich and owning prestigious things is valued by 87% of Chinese and 51% of Russians, but just 22% of Canadians and Australians, and 27% of Americans.
One can see Canadians' value set when compared with how they relate to Colgate and Nike. Fresh Intelligence has ranked the latter with a negative glocalization score, compared with a strongly positive score for Colgate.
"Values associated with Nike -independence, challenge, prestige -are not the top values associated with Canada, such as safety, responsibility, being hardworking, caring about others," Ms. Churkina said. "Nike's values are not as important for Canadians. In the U.S., the brand indexes much higher."
Colgate is a brand that adapts well to multiple markets, including Canada. In China, where the toothpaste communicates key values of being healthy, active and strong, 67% of the population uses Colgate and will continue to use in the future. It has a glocalization score of 72.
In Russia, "Russia and Colgate share the value of being attractive to the opposite sex, physically beautiful, which is specific to Colgate's communication in Russia only," Ms. Churkina said. Colgate has a score of 47 in Russia and 44% of people use the toothpaste. In Canada 46% of people say they use Colgate, where Fresh Intelligence determined it links to key values of being a family-oriented brand, linked to reliability and trustworthiness. It has a glocalization score of 59.
Nescafé has also performed well on its value communication in different markets. In China, its messaging is about enjoying life to the fullest; in Australia it speaks of being successful and well respected. Nescafé enjoys strong glocalization scores and is used by more than half of the consumers in China and Australia. "Nescafé has found the way to communicate a great perception of its coffee, but for triggering different emotions," she said.
While Fresh Intelligence does not break out the impact of social media specifically, it stands to reason that it is most easily positioned to target specific groups of consumers, Ms. Churkina said. "Social media really talks in the language of the consumer," she said. "It really helps brands to communicate sharing the values of a local consumer."